Chosen by Asker

The guidelines for a mortgage have changed. No, it is not to keep you in a higher interest loan. One year ago the debt to income ratio may have been 50% (your bills are 1/2 of your gross income). If the bank has now changed the guidelines to 25% this would make you "unqualified. For example: (assume you have no other debt for this example) 1 year ago: your monthly income--- $3000.00 your payment on $255,000 mortgage at 7% was $1500.00 you debt to income ratio was--50% Today: your month income-- $3000.00 new mortgage at 5% on $220,000 (again a guess) would be $1200.00 your debt to income ratio is--40% If the guidelines the bank is now using is a ratio of 39% you don't qualify. You can change any of the above numbers, have a credit score of 850, etc. but if you don't meet the ratio quota, you don't qualify, period. You say: "My point is no-one including me should have to meet a quota when it comes to wanting to lower your payments to make life easier for home-owners to pay there mortgage back to the bank" In theory everyone (including me) will agree with you. However---That is the EXACT thinking by homeowners, bankers, investors, the Federal government, etc., etc. that got this country into this mortgage and foreclosure mess we are trying to get out of. It's unfortunate, but that's the reality of our new financial business system.

by jonny j

5 months ago

Asker's Rating: 

I have refinanced several times over the last thirty years. Never to pull money out - always to try and better my position with whatever house I own at the time. I have found several things to be true and some of them seem to contradict each other. Your mortgage company has rules- and the clerk you speak with when you call will try their best to follow those rules so they don't get fired. Call again the very next week. You will be talking to a new clerk. There may be new rules. They may interpret the rules differently. You may say things to them in a slightly different way. Do not "spin" your story the same way to the mortgage company as you said it to us (of course). You are not speaking to people with lots of power. These people are following rules that some CEO has made up. But the thing on your side is that these same clerks may be paid extra for creating new loans or for refinancing new loans. They are only paid a regular salary for turning you down.

by glenn- 5 months ago

Times have changed. In 2005 WaMu had opened too many branches and multiple branches in my area were competing with each other to refi my WaMu mortgage. I could have refi'd with no closing costs, but instead picked one with lower interest and total closing cost was only $170 (they refunded $125 of $295 application fee). I also got out of tax escrow and they gave me a free HELOC to borrow back paid principal. But now credit is tight because the banks do not know who will still be able to pay, so they want to get their money while they can. They are unlikely to accept lower interest, unless they know you qualify to go elsewhere, or are willing to trash your credit to scare them into thinking they will have yet another potential foreclosure.

by efflandt- 5 months ago

My best advise, use another lender, and talk with local banks, you want your money working within your community and not having your loan sold off to the secondary market. As I tell anyone who will listen, these lenders are continuing to rape the American people on loans and being rewarded for this by our own government, and we're paying the price!

by Alterfemego- 5 months ago